JSDC looks for a refund: Jamestown/Stutsman Development Corp. wants Champ Industries to return $45,000 from grant

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The Jamestown/Stutsman Development Corp. Board wants Champ Industries to repay a $45,000 grant it received in 2009 because of hiring stipulations that haven’t been fulfilled.

The board voted unanimously Monday to ask for money.

Connie Ova, JSDC chief executive officer, said the original grant helped cover Champ’s relocation and expansion costs and was based on $5,000 in grant money for each of 32 full-time equivalent employees. Champ was found to be nine employees short of the goal as of Dec. 31, 2012. The “clawback” — a part of any grant that requires funds be repaid if the goals of the grant are not met — amounts to $5,000 for each of nine positions.

JSDC has already extended Champ Industries one year of extra time to add the required employees, Ova said. The money collected from Champ will be held in escrow and the JSDC will return $5,000 for each new hire made before the end of 2013.

“The majority of the problem is through no fault of their own,” Ova said. “But we’ve already given them an extra year.”

Ova anticipate similar situations with other manufacturers yet this year. She said requiring Champ Industries to pay back the full amount but holding it in escrow for a year may set a policy for similar issues.

“Being consistent is easier to deal with,” she said.

Gary Riffe, chairman of the JSDC Board, said the grants needed to be paid back.

“If we give them money they’re on the hook to pay it back if they don’t meet the requirements,” he said.

Local officials with Champ Industries referred requests for comments to corporate headquarters, which did not return calls.

In other action, Ova reported that the loan documents on the Cherry Berry store had been signed.

“He (Kal Patel) has purchased the building and the Cherry Berry franchise,” she said. “He is still looking at other options for another business venture within the building.”

Patel had received a Flex Pace interest buy down incentive plan for the Cherry Berry operation in September 2012. Ova said Patel has not set a date for opening.

The Flex Pace interest buy down includes a $54,000 loan from JSDC that triggers a $100,000 grant from the Bank of North Dakota to reduce the interest rate on the business loan by up to 5 percent. The plan drew controversy in July and August 2012 because of the wages of $8 to $8.50 per hour that the business was expected to offer.

Sun reporter Keith Norman can be reached at 701-952-8452 or by email at knorman@jamestownsun.com

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